Unwavering Fealty to a Failed Theory

[Jason Harvestdancer]

I did not write that it IS Keynesian. I wrote that it is DERIVED FROM Keynesian.

Everyone who called fail, please revise your own comprehension fail.

 

[SimpleDon]

Supply side economics is derived from Keynesian economics, the idea that you can stimulate the economy through stimulating supply through targeted tax cuts and subsidies to the suppliers.

Like everything Keynesian, it doesn't work.

I did not write that it IS Keynesian. I wrote that it is DERIVED FROM Keynesian.

Everyone who called fail, please revise your own comprehension fail.

It seems to be a distinction without a difference.

Especially when you add "Like everything Keynesian, it doesn't work." This is the statement that I was challenging.

Keynes wasn't trying to devise a new economic system like Marx or von Mises were. He was explaining the economic system that we have, the one that exists.

Supply side economics is therefore derived from Keynesian economics, in the respect that it is part of the real economy. Keynesian economics can explain supply side economics and why it was doomed to fail.

Supply side economics, not too surprisingly, was based on the assumption that the modern economy is supply side lead. Keynes explained that the economy in 1936 was increasingly demand side lead and that in the future, like now, that the economy was becoming even more demand side lead. This is the reason that supply side economics failed. By suppressing wages supply side economics suppressed demand.

 

[laughing dog]

I did not write that it IS Keynesian. I wrote that it is DERIVED FROM Keynesian.

Everyone who called fail, please revise your own comprehension fail.

You are correct. Supply side economics is not Keynesian in any fashion. Keynesian macroeconomics concentrated on the demand side of the economy which has nothing to do with supply side economics. Saying it is "derived" from Keynesian economics is rather a stretch.

The major influence of supply side economics is to remind policy makers and citizens that there are important and direct connections between short-run macroeconomic policies and longer-run growth. Early Keynesian were overly optimistic about overall effectiveness of Keynesian polices in managing an economy. Early supply-siders were overly optimistic about the overall effectiveness of their policies. In both cases, I think the failures are more due to politicians who unscrupulously twisted economics to advance their ideology than in the actual applicability and usefulness of the theories.

 

[fromderinside]

I did not write that it IS Keynesian. I wrote that it is DERIVED FROM Keynesian.

Everyone who called fail, please revise your own comprehension fail.

No brass ring.

It isn't actually derived from Keynesian theory at all. If it were t would include a balance between supply and demand. Supply side restates older models.

 

[untermensche]

...Supply side economics is therefore derived from Keynesian economics, in the respect that it is part of the real economy. Keynesian economics can explain supply side economics and why it was doomed to fail...

It isn't a failure.

Supply-side does exactly what the people who devised it wanted it to do.

Make a few very rich at the expense of everyone else.

 

[SimpleDon]

...Supply side economics is therefore derived from Keynesian economics, in the respect that it is part of the real economy. Keynesian economics can explain supply side economics and why it was doomed to fail...

It isn't a failure.

Supply-side does exactly what the people who devised it wanted it to do.

Make a few very rich at the expense of everyone else.

I was referring to the nominal, stated reason for adopting neoliberal economic policies, to have economic growth greater than had been seen under the demand side policies of the post war period. This growth was suppose to provide more jobs and widespread prosperity among everyone in society. It was a failure because it brought lower growth, lower employment, that is fewer jobs and increased prosperity to only the already rich. Which suited its strongest advocates, the already rich, as an acceptable result. And apparently it is an acceptable result to conservatives because they not only vote to continue the policies, they vote to double down on them and to increase the already substantial income inequality in the country.

What I was trying to find out with this thread is why conservatives support these policies. None came forward to explain why they do, except for Jason, whose hated for Keynes is his reason. A totally absurd one in my opinion, because Keynes wasn't trying to devise a new economy like Marx and von Mises were, he was trying to explain the economy of his day, 1936. Keynes was not happy with his own explanation. He wished that it could have supported the neoclassical economics of his mentor, Marshall. But it didn't and it was obvious why it didn't.

Marshall's neoclassical economics was based on the economics of the classical period, hence the name. But what Keynes realized was that industrialization had fundamentally changed the economy. It was no longer constrained by limited capital, supply. That demand was increasingly limiting the economy and that in the future it would be even more of a limiting factor than supply. As it has become.

 

[ksen]

Was Marx trying to devise a new economy? I thought in Capital he, like Keynes in his General Theory, was just describing the economy of his day.

 

[SimpleDon]

Was Marx trying to devise a new economy? I thought in Capital he, like Keynes in his General Theory, was just describing the economy of his day.

Marx's das Kapital was preceded by nearly two decades by Manifest der Kommunistischen Partei, The Communist Manifesto. In which Marx and Engels laid out how capitalism would be replaced by socialism and eventually, by communism. A change in the economic system, for sure.

 

[SimpleDon]

Of course, von Mises in Human Action advocated changing our government involved, mixed mode capitalism into his idealistic free market with no government supervision, because he was as sure as anyone could be that the self-regulating, self-organizing free market could exist, in spite of all of the evidence to the contrary.

 

[ksen]

Was Marx trying to devise a new economy? I thought in Capital he, like Keynes in his General Theory, was just describing the economy of his day.

Marx's das Kapital was preceded by nearly two decades by Manifest der Kommunistischen Partei, The Communist Manifesto. In which Marx and Engels laid out how capitalism would be replaced by socialism and eventually, by communism. A change in the economic system, for sure.

fair enough

 

[arkirk]

Marx's das Kapital was preceded by nearly two decades by Manifest der Kommunistischen Partei, The Communist Manifesto. In which Marx and Engels laid out how capitalism would be replaced by socialism and eventually, by communism. A change in the economic system, for sure.

fair enough

You are looking at a broken system that extremely over-rewards some and fails to support others. It has obvious built in flaws. Marx clearly saw these flaws and wrote about them. I too see the gross unfairness that abounds in our society due to an economic system that parasitizes the vast majority of society for the benefit of a tiny minority. The problem as I see it is that this tiny minority is so desperate to maintain its grip on ownership of society, it will not eschew violence...to the rest of society and to the environment itself. Anything goes to support this tiny minority's addiction to control.

This problem has been present in the human race, perhaps from the very beginning of any kind of organized society. This situation made it possible for the Church to define all mankind as sinners and to demand the fealty of society as a whole. All of my life I have been aware of the failings of Capitalism and its attendant physical effects on the environment and on society as a whole. What strikes me is that we are looking at the outcome and product of worldwide promotion and reproduction of this system.

At the turn of the 20th century there were varying ideas as to how to change this system in competition with each other and unfortunately most just turned out to be arguments to empower neo-liberal politics and extend the inequities of Capitalism. So here we are now with a pile of revolutions behind us and still in bondage to a system that penalizes the non owner classes of society worldwide. The Wall Street Bankers and hucksters call it a Free Market. The question I think we need to ask is HOW DO WE GO FROM HERE TO A BETTER SET OF HUMAN RELATIONSHIPS....WITH EACH OTHER AND THE ENVIRONMENT?

I suspect that if we ever start working on that problem in earnest, the world will quickly take on a different look and Capitalism will simply be replaced piecemeal with better ideas. There will not need to be a revolution with guns and rope neckties. This has already shown its ineffectiveness in making meaningful change.

Currently, we are a system slowly drowning in the EXHAUST GASSES of Capitalism. It is my fervent hope we can avoid violent revolution because that always leaves the most violent in charge. They are also the ones who assure Capitalism will continue at the expense of society in the round.

 

[laughing dog]

Was Marx trying to devise a new economy? I thought in Capital he, like Keynes in his General Theory, was just describing the economy of his day.

Marx's das Kapital was preceded by nearly two decades by Manifest der Kommunistischen Partei, The Communist Manifesto. In which Marx and Engels laid out how capitalism would be replaced by socialism and eventually, by communism. A change in the economic system, for sure.

Yes, but Marx thought that change would occur organically - that it was inevitable.